Illinois Casino Revenue Down…

4 12 2008

….and they’re blaming it on the smoking ban.  When you look at the numbers, it’s pretty hard to argue with that assumption.  Overall, casino revenue is down 7 percent while Illinois’ numbers are down 20.3 percent.  It’s not that attendance is down.  There’s another reason.

“Although the number of people coming to the casinos is about the same, the time they spend inside is down. They’re outside smoking. And in this business, if you’re not putting money in the machine or on the table—time is money.” (Tom Swoik, executive director of the Illinois Casino Gaming Association)

Illinois is different from Michigan in that all casino’s are effected.  There are no tribal lands in Illinois.  The problem is there are also no land based casino’s right now.  All the casino’s are old riverboats that are permanently docked, so they’re all on rivers.  The rivers are all close to the border states of Iowa, Indiana, and Missouri so in most cases, you can literally go a mile and a half across a bridge and be in a casino that allows smoking.   What the article doesn’t say is how Peoria is doing.  The Par-A-Dice Casino in East Peoria is at least an hour and a half to two hours from a smoking casino.  I’d be surprised if they saw a 20 percent drop, but it wouldn’t surprise me if the Moline riverboat dropped much higher due to another boat in Davenport, IA less than a mile away.

My opinion is still that Illinois is not the problem.  The problem is the surrounding states being pansy’s and giving into the casino lobby.   They need to create a level playing field.  It’s always tough to be the first to do something.  Illinois is going to take some hits, but in the long run, they are making the right decision.  Delaware did the same thing and while their revenues dropped at first, they have recovered and are now above the pre-ban level.  It can be done.  It just takes lawmakers with some guts to make the right move.

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5 responses

4 12 2008
Mike

As long as there are U.S. tribal casinos, the field will never be level. Most tribes will fight tooth and nail on the smoking issue, because it’s self-governance.

Atlantic City repealed its 100% smoking ban after about 2 weeks this fall.

Gambling has always been about time on machine or at the tables. The house’s edge is constant; time is the only variable. The longer you play, the more the house will win.

Even if the playing field were level, smokers would gamble less under a ban. That’s why opposition is so fierce. That and the states befing addicted to the tax revenue from casinos.

What doesn’t get reported a lot about Delaware is the fact their casinos are only slots parlors and to help the casinos after the smoking ban, the state extended operating hours and the number of machines allowed. Even with all that, overall revenue was near flat after a year and growth was nonexistant for 2 more years beyond that.

Meanwhile, Atlantic City was still raking in cash back then.

But back to Michigan: I just can’t figure out why Mike Bishop and the Senate refuse to negotiate. Maybe that will change next week.

4 12 2008
Mid-Michigan Dining

I know..it’s all about tax revenue. I get that…just wishful thinking on my part…I’d be happy if I’d never have to inhale second hand smoke again, but it’s not going to happen.

5 12 2008
Mike

I still think a ban is quite possible this year, unless the Senate just refuses to deal with the issue or gets boggged down in other stuff, so don’t give up hope.

I also think the anti-smoking lobby overplayed its hand here. For the last two years, they’ve essentially urged lawmakers to accept no exemptions when every other statewide smoking law has a few carve-outs.

They should have known the all-or-nothing approach would not sit well with many Michigan lawmakers, especially in a recession.

5 12 2008
Mid-Michigan Dining

That’s pretty much how the lobby works. Go for the complete ban and be happy with what they get. The lobby in Illinois did the same and they only exception granted was cigar shops, but there was a grandfather clause…I don’t remember the details, but I’m not sure that new cigar shops will be exempt.

The latest thing I heard was Bishop was considering an amendment to the bill allowing bars and restaurants to opt out by buying a special license. I hate the idea. The license better be something like $10,000+ a year or it will do no good. Of course a place would fork over $500 a year to continue to allow smoking.

5 12 2008
Mike

Still, they should have known early on the casinos would be fighting this very hard. I saw a pro/con interview with a restaurant association rep in June 2007 who told a senator supporting the ban that “The Detroit casinos already have exemptions into the bill,” and he added that the Indian casinos across the state cannot be regulated, so the bill will never be fair. The senator seemed truly suprised when told that.

As for Illinois’ law, I travel a lot for work and try to keep up on local and state smoking laws accross the country so I know where to go to enjoy my cigar in peace. The law in Illinois is pretty much the one requested by the anti-smoking groups, which included an exemption for existing cigar shops and 20% of hotel rooms, if the operator chooses to permit smoking.

Any cigar stores opening after 2008 are required to be in a stand-alone building or they must ban smoking. Again, this was not something negotiated; it was proposed that way.

I think the anti-smoking groups here were going for some sort of platinum-standard ban that could be held up as the new national model. It didn’t work.

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